STMicro forecasts lower-than-expected Q4 sales, shares fall

By Nathan Vifflin (Reuters) -STMicroelectronics on Thursday forecast fourth quarter sales below market expectations, showing a slower than expected recovery in its main markets and sending its shares lower. One of Europe's largest chipmakers, whose clients include Tesla and Apple, sees fourth quarter revenue reaching $3.28 billion, up from the $3,19 billion it reported this quarter. Analysts polled by LSEG had forecast fourth quarter revenue of $3.34 billion, and $3.12 billion in the third quarter. STMicro shares fell 5.8% in early trade, the worst performer among France's CAC 40, and Italy's FTSE MIB blue chip indexes. "The sales guidance confirms… that though the industry is in an up-cycle, the up-cycle is very muted" analysts of JP Morgan said in a note. Chipmakers exposed to the struggling automotive, industrial, and consumer chip markets such as STMicro, Texas Instruments, or NXP have faced a multi-year long sales slump since the pandemic's end, hit by low demand, high inventories, and geopolitical disruptions. Analysts had raised concerns after U.S.' Texas Instruments forecast a dour fourth quarter on Wednesday, with sales falling more than expected. STMicro's third quarter results were lifted by stronger sales of imaging sensors and microcontrollers, but weakness in power and discrete products for cars and factories hurt results. "Our strategic priorities remain clear: accelerating innovation; executing our company-wide program to reshape our manufacturing footprint" STMicroelectronics' STMicro's chief executive Jean-Marc Chery said in a statement. The Franco-Italian firm also trimmed its capital expenditure plans for the year of 2025, citing current market conditions as a reason. STMicro's capex plan is now slightly below $2 billion, from a range of 2$ to $2.3 previously. The firm also said its cost-cutting plan "remains on schedule" after it faced opposition in Italy over its implementation. (Reporting by Nathan Vifflin in Gdansk; editing by Matt Scuffham)

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